The term “Financial Controller” can be a difficult term to define because it is most times mistaken for a bookkeeper or an accountant. This is because its definition covers pure accounting, finance strategy, and leadership.
As a small business grows, its owner tends to spend too much time working on the accounting books rather than conducting business. In cases where there is a bookkeeper or accountant already on board, over time that person eventually becomes unable to support all the financial data needs of the business owner and outside stakeholders and that is where the role of a financial controller comes in.
A financial controller otherwise known, as a “company historian” essentially is a company’s lead accountant or accounting professional with staunch regard for accuracy, process, and policy, that oversees accounting activities and ensures that ledgers accurately reflect money coming in and out of the company.
A financial controller should be a senior-level manager who can efficiently oversee a business’s day-to-day operations.
The role and responsibility of a Financial Controller can vary greatly depending on the size of the organization and industry. The financial controller in small-scale businesses, whether internal or contractors is mostly involved in detailed accounting tasks that are beyond the skill and ability of the company’s bookkeepers.
However, in medium-scale businesses, the responsibilities increase and become broad. Here financial controller duties are likely to include project management, technology, insurance, and compliance functions.
On the other hand, in large enterprises, financial controllers work with chief financial officers (CFOs), chief accounting officers (CAOs), finance managers, and treasurers to control the finance and administration function.
Generally, financial controllers are responsible for providing accurate and timely company records by managing the accounting function, which includes owning the financial close process and producing financial statements and reports in an accurate, timely and efficient way to guide decision-making.
To carry these responsibilities effectively, they must understand the operations of the business and the underlying relationships between ,inputs, outputs and the processes that support them.
Good financial controllers need to have both keen attention to detail and the bigger picture in mind because they are tasked with ensuring accuracy and improving the company or organization.
Some of the roles of a financial controller include:
Approving invoices: Financial Controllers ensure that invoices are properly approved and coded in the general ledger without error.
Audit liaison: Financial Controllers coordinate with external financial, compliance, and tax auditors to ensure adequate production of the company’s financial statement and report.
Budget: They also take part in assisting or fully creating the budget, including incorporating historical data.
Cash flow management: They also monitor and balance cash flows into and out of a business to meet obligations and optimize investment.
Debt management: Administering loan agreements for company borrowing money owed to the company from customers.
Internal controls: It is the job of a financial controller to create and monitor company policies and intentions, safeguard company assets, and reduce fraud.
Financial strategy: This involves developing a financial strategy, risk minimization plans, and opportunity forecasting.
Reporting and analysis: This involves providing proper financial reports and analysis to guide decision-making in the company.
Cost savings: Financial Controllers identify efficiencies and opportunities for cost reductions across the business.
Leadership: They are accounting professionals and as such, should mentor junior accountants and other financial staff.
Compliance: They ensure total compliance with local law, tax provisions, and relevant industry and financial regulations.
Banking: The financial controller sets up bank accounts and manages banking relationships.
Stakeholder management: Advising company managers on operations activities based on knowledge of the underlying business.
External reporting: Preparing company tax and financial statements, which includes public filings with the Securities and Exchange Commission (SEC)
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